Biotechnology company Amgen is investing US $2.7 billion in the Chinese biotech firm Beigene.
The all-cash deal values gives Amgen a 20% stake in BeiGene and going foward, BeiGene will commercialize some of Amgen’s cancer drugs which will be sold in China.
The two companies will also work together to develop 20 BeiGene cancer drugs in China and elsewhere. The deal increases Amgen’s footprint in China’s rapidly growing pharmaceutical market.
Amgen is an American multinational biopharmaceutical company based in California. It operates in 120 countries with a focus on six therapeutic areas: cardiovascular disease, oncology, bone health, neuroscience, nephrology and inflammation.
Its medicines typically address diseases for which there are limited treatment options, or are medicines that provide an alternative option to what is otherwise available.
Beigene was founded in Beijing in 2010 and opened its first US office in 2015. In 2016 it became the first Chinese- biotech to go public on the Nasdaq exchange with an $182 million IPO.
BeiGene develops molecularly targeted and immuno-oncology drugs to treat cancer. Amgen says the investment means it has expanded its geographic presence from approximately 50 to 100 countries since 2011.
BeiGene will spend as much as $1.25 billion on the drug development program with Amgen who will pay royalties to BeiGene on the sales of these products outside of China.
The Chinese pharmaceutical market is growing by double digits and is in second place behind the United States. The investment is another example of how growth in healthcare services in emerging markets like China is leading to investments by established multinationals.
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